Specialty Contractor

Financial Management User Guide

For Specialty Contractors This user guide provides specialty contractors with information about how to use Procore's Project Financials tools to streamline your financial business processes across your project's lifecycle. Some of the things you'll learn in this guide include:

How to set up your budget code structure. Learn the basics for setting up a company and/or project budget code structure using Procore's Work Breakdown Structure feature. See Budget Code Setup. How to add or import an accurate project budget. Learn how to add budget line items to your project, configure and assign budget views to your project, and how to set up a forecasting view to identify and track critical project costs. Use data collected from the field to track your project's labor costs and to log production quantities in your budget. Learn how to create budget changes to reallocate funds from one budget line item to another.  See Budget Setup. How to create one or more client contract(s) for your project. Set up your contract tool and learn about the considerations to keep in mind if your project has multiple funding sources or delivery methods. Manage the GC/Client invoice process and create a payment received log. See Client Contracts tool. How to manage your project's commitment contracts. Learn about the Commitments tool's configuration settings and how to create commitments for your downstream collaborators. Designate invoice contacts to submit invoices against those commitments and create a payments issued log. See Commitments. How to improve oversight and management project changes. Choose between managing change orders with or without the Change Events tool. Configure your change order tier settings for your contracts. Bring change management to the field––facilitating faster approvals, more accurate communication, and eliminating the need to proceed at risk. See Change Management Tools. How to administer the progress billings for your project's subcontractors. Define your billing periods and choose your project's desired method for creating and submitting progress billings. See Progress Billings. How to manage your project's direct costs. Learn how to manage costs not associated with your purchase orders and commitments. See Direct Cost.

Budget Code Setup

The first step when setting up Procore's Project Financials tools in Procore is to verify that your company and project is set up with a budget code structure that works for your specific business. In Procore's Work Breakdown Structure, budget codes are the basic building block for the financial line items on your budget. Through the use of budget codes, you can create a budget that is granular or as basic as you need. 

If you are a specialty contractor, Procore recommends the following:

1. Create Your Company's Work Breakdown Structure. Work with your company's stakeholders to decide if you want to use Procore's default Work Breakdown Structure or if you want to customize your Work Breakdown Structure for your company's account. To learn more, see Create Your Company's Work Breakdown Structure.
2. Create Your Project's Work Breakdown Structure. Decide if you want to use your company's Work Breakdown Structure on your projects or if you want to customize the Project level Work Breakdown Structure. You can include the optional 'Sub Job' segment at the project level. To learn more, see Create Your Project's Work Breakdown Structure.

Budget Setup

Procore's Budget tool helps your project team efficiently manage your project's budget. It is designed to help your team make informed financial decisions, track expenses against your budget in real-time, analyze historical snapshots, input detailed forecasts, and offer deeper visibility into the financial status of your project.  With the use of budget codes, you can create a budget as granular or as basic as you need.

• Add Your Project's Budget Data. When getting started on a project, the first step is to Set up a Budget in a New Procore Project. You can choose from two methods: (1) Add a Budget Line Item directly to the Budget tool or (2) Download and complete a budget template and complete the steps to Import a Budget. 
• Configure Your Project's Budget Views. After adding your project's budget data, your Procore Administrator might want to explore our dynamic and customizable budget views. For details, see Set up a New Budget View. You can set up one, or multiple budget views, along with a wide variety of data columns, such as Original Budget Amount, Budget Changes, Revised Budget, Pending Budget Changes, and more. You can also actively manage and monitor your project's budget using the 'Forecast to Complete' feature. For details, see Use the Forecast To Complete Feature. 
• Utilize Data Collected in the Field to Track Labor Costs and Production Quantities. For customers that have purchased Procore's Workforce Management and Field Productivity tools, your budget can be set to automatically  Add a Budget View for Real-Time Labor Costing and Set Up the Procore Labor Productivity Cost Budget View.
• Reallocate Funds from One Line Item to Another Using Budget Changes. Use the budget changes feature to transfer money between budget codes. For example, if you have cost savings related to one budget code because it came in under budget, but expect another budget code to come in over budget, you can reallocate funds from the first budget code and add it to the latter budget code as a contingency. Budget changes only appear on the Budget tool, so your vendors will not see your internal adjustments. For details, see Create Budget Changes

To learn what else you can do with the Budget tool, see Budget.

Client Contracts Tool

After setting up the Budget tool, you can begin creating one or multiple client contracts for your project. With the Client Contracts tool, your team can replace stacks of paper and expensive printer costs with a central location for digital contract management. 

• Set Up Your Client Contract.  While most Procore customers create a single client contract for a single construction project, project teams do have the option to create multiple client contracts in the Client Contracts tool. For details, see Create Client Contacts. Similar to budget, you can also choose from two methods for setting up your client contract: (1) You can manually Update the Schedule of Values (SOV) on a Client Contract or (2) you can Import a Client Contract SOV from a CSV File. When finished with the initial setup, simply approve it. See Approve a Client Contract.

   Tip

  Does your construction project have multiple funding sources or progress billing requirements?  Learn why some specialty contractors decide to create multiple client contracts on their Procore project. This is helpful when you have a need to divide the scope of work on a project into multiple phases or stages, however, doing so does present a few considerations.  For more information, see Are there any system limitations when projects have multiple client contracts? 

  An alternate way to manage these types of requirements is to use the Sub Job feature. To learn more, see What's the difference between a job, a parent job, and a sub job? 

• Create and Manage Owner Invoices. After your client contract is set and you've set up the Commitments tool as described below, you can also create and manage your owner invoices. An owner invoice is an itemized record of a financial transaction between your client and you. Typically, the itemized breakdown is dictated by the general contractor and then you submit your invoice data to them, so they can then submit their invoice to the project owner when payment is due. See Create an Owner Invoice.
• Create a Payments Received Log.  After you receive your payment, you can also create a log to track the payments you've received. For details, see Create a Payment Received.

To learn what else you can do with the Client Contracts tool, see Client Contracts.

Commitments Tool

After your contract(s) are approved and completed in the Client Contracts tool, you can begin setting up your project's commitments. Typically,  you will create commitments when your company is subcontracting out work. 

In Procore, you can create two types of 'commitments': subcontracts and purchase orders.

• Set Up Your Contract Configuration, Dates, Distribution Lists, and Settings. Your company's Procore Administrator can work with you to define your project's default contract configuration. This is an important step before you start creating commitments on a project. You can choose the number of change order tiers for your commitments. You can also enable a variety of dates to use on your contracts by default. Settings also include default distribution list settings, your default accounting methods, setting a retainage percent (if applicable), and deciding to enable financial markup or payments by default. For details, see Configure Settings: Commitments. 
• Create Your Project's Purchase Orders. In Procore, a Purchase Order (PO) is a documented financial commitment that details the types, quantities, and agreed-upon prices for products or services. As part of the procurement process, purchase orders are created by a 'buyer' (for example, a specialty contractor) and issued to a 'seller' (for example, a supplier) to cover the cost of a contract. Once accepted by the 'seller,' a purchase order represents an agreement between the two parties. See Create a Purchase Order. 

   Tip

  In Procore, purchase orders and subcontracts are used exclusively to bill for pre-determined costs recorded in your project's budget. It's important to note that purchase orders are not designed to be used as a running tab. For example, if your company's practice is to create an invoice to pay for your purchase orders as items are delivered, you would want to create a direct cost instead of a purchase order. See Direct Costs Tool. 

• Create Your Project's Subcontracts. A subcontract is a contractual agreement between the contracting company and the subcontractors who perform the scope of work. In Procore, there are two ways to create a subcontract: (1) You can Award a Winning Tender and Convert it into a Subcontract, or you can (2) directly Create a Subcontract in the Commitments tool. 
• Create Subcontractor Invoices and Manage Invoice Contacts. Using the Commitments or Progress Billing tool, you can also Create an Invoice on Behalf of an Invoice Contact or you can provide your subcontractor's invoice contacts with the appropriate permissions to access their purchase orders and subcontracts. See Add Invoice Contacts to a Purchase Order or Subcontract. Users with 'Admin' permission on the Commitments tool can also use those permissions to manage invoices with the Progress Billing Tool. 
• Create a Payments Issued Log.  After you start issuing payments on your project, you can create a log to track the payments you've issued. Your budget and budget reports are automatically updated to reflect your entries. See Add Payments Issued. 

To learn what else you can do with the Commitments tool, see Commitments.

Change Management Tools

Next, start learning about Procore's change management tools.  You can create two types of change orders in Procore. There are two options for setting up these tools: (1) Change Orders with Change Events or, (2) Change Orders without Change Events.

Progress Billings Tool

Procore's Progress Billings tool uses the user permission granted in the Commitments and Client Contracts tool. As your project progresses and the contracts have been created and approved, subcontractors can bill you for completed work via subcontractor invoices. You can also create owner invoices, which can then be emailed to the owner or the party that is being responsible for payment approval.

• Manage Billing Periods. If you subcontract out work, the billing period defines the billing cycle that is used for progress billing applied to your project's subcontractors. In addition to defining the frequency of the billing period (for example, monthly or weekly), it also defines the billing period's start date, the invoice's due date, and the billing period's end date. To learn how to create a billing period with the Progress Billing tool, see Create Manual Billing Periods and Create Automatic Billing Periods.

• Create and Manage Progress Billing. With the Progress Billings tool, you can keep user permissions restricted to your project team and Create an Invoice on Behalf of an Invoice Contact or you can provide your subcontractor's invoice contacts with the appropriate permissions to access their purchase orders and subcontracts. See Add Invoice Contacts to a Purchase Order or Subcontract. Then, when you are ready for your subcontractors to bill you for their work, you can Send an 'Invite to Bill' to an Invoice Contact and your subcontractors can then Submit a New Invoice as an Invoice Contact. You can then review and approve these billings.

To learn what else you can do with the Invoicing tool, see Progress Billings.

Direct Costs Tool